South Korea and Canada reached a free-trade agreement on Tuesday last week that the two governments hope will boost exports and investment.
After more than nine years of negotiations, the two countries said they would remove tariffs on most goods within a decade of the pact taking effect.
Canada says the deal will boost exports by 32 percent, equivalent to C$1.7 billion (US$1.5 billion) a year. South Korean exports should grow by 20 percent a year, or about C$1.3 billion.
Canada agreed to eliminate tariffs on South Korean vehicles within two years of the deal being ratified. South Korea will reduce tariffs on Canadian beef over 15 years, according to South Korea’s statement.
The deal was announced after South Korean President Park Geun-hye held talks with visiting Canadian Prime Minister Stephen Harper in Seoul.
It is Canada’s first free-trade agreement with an Asian nation. Much of Canada’s trade is with the US, due to a North American free-trade area formed in 1994 with the US and Mexico.
South Korea said the deal is expected to boost Hyundai, Kia and other South Korean auto brands in Canada, which is South Korea’s fifth-largest market for exported vehicles.
Last year, South Korean automakers had a combined 12 percent share of the Canadian auto market, compared with 34 percent for Japanese brands and 45 percent for US vehicles.
The deal will also eventually help Canadian farmers and ranchers that compete with the US and Australia to woo consumers in South Korea, a major meat importer.
The two countries agreed to phase out tariffs on most meat and agricultural products imported to South Korea.
Seoul currently imposes 40 percent tariffs on Canadian beef.
South Korea has opened its meat market to the US with a free-trade agreement that went into effect about two years ago.
The country, Asia’s fourth-largest economy, also signed a free-trade deal with Australia, a major meat exporter, last month and is in trade talks with New Zealand.
South Korean farmers and ranchers have been opposed to the pact with Canada since the beginning of the talks in 2005.
However, the focus of domestic opposition to free trade has recently been on a possible deal between South Korea and China, and South Korea’s steps toward joining a US-led pact covering more than a dozen Pacific Rim nations, said Park Hyung-dae, a director at a national union of farmers.